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Employees say:"I have a People Leader that does not micromanage but is available to provide assistance when I need it. I love the guidance and training that People Leaders receive from Corporate. I enjoy the people I work most closely with, who are from all over the country. I also love working remotely and, as an introvert, think that I work best that way. I also love Centene's focus on work/life balance. "

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Employees say:"I appreciate that the company has responded to feedback from employees and implemented/modified areas that truly make a difference to those working here. I believe that this has led to a better morale overall and results in more commitment and dedication from employees."

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Employees say:"I love our mission and each day I see how our team and all the employees from within the organizations strives to achieve the upmost of our mission. I love what I do, what we do for our community and our members. Always going above and beyond, the recognition of each staff member speaks volumes to myself and others."

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The 300 companies on this list are transforming industries from the inside out.

GPTW Health Care Large 2023-Centene Corporation

Employees say: 
 
"At Centene Corporation, new, innovative ideas are encouraged. We constantly strive to work with community partners and invest in the communities we serve. We are constantly evolving and are flexible to handle change."

GPTW Women 2023-Centene Corporation

Employees say: 
 
"The leadership 'talk the talk and walk the walk.' They say what they want to do, then they do it. Mission and business focused. Support for the 'sandwich' generation mom, like myself, has been great."

The Fortune 500, in its 69th year in 2023, ranks the biggest U.S. companies by revenue.

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The health care company, led by CEO Sarah London, focuses on insurance plans offered through Medicaid and the Affordable Care Act. Revenue was up 15% in 2022 from the previous year. 
<ul> 
 	<li>Centene’s $2.2 billion acquisition of behavioral-health specialist Magellan Health, completed in January 2022, was cited by the company as a major factor in its revenue growth for the year.</li> 
 	<li>Elsewhere, Centene has been divesting itself of “noncore” subsidiaries in an ongoing review of its portfolio. Divisions that it has sold off include Magellan’s pharmacy and specialty-health units. In May 2023, Centene announced it would divest its A.I.-powered health care analytics company Apixio.</li> 
</ul>

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Aggregate sales hit $37.8 trillion last year—an increase of 19%, the highest annual growth rate in the list’s history.

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Employees say: 
 
“Yes, we operate as family. Everyone has the same goals and that is to take care of our members and each other. Executive leadership is very personable and accommodating. This company does its very best to reward their employees and accommodate them the best way that they can. I love my company. Everyone is very friendly, family oriented and considerate of one another. I would recommend Centene/Superior Health Plan to anyone that I feel would be a good fit for the company.”

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A global health crisis continued to drive revenue growth at Centene, a health insurer with considerable exposure to the Medicaid and Affordable Care Act marketplaces. Revenue increased 13.4% in 2021, to $126 billion, and as of early 2022, Centene’s managed care membership had increased by 1.9 million over the previous year. In January 2022, Centene acquired Magellan Health for $2.2 billion, expanding its behavioral-health offerings. The company is also coping with a loss in the corner office: In April 2022, CEO Michael F. Neidorff, who headed Centene for more than 25 years, passed away after a long illness. Sarah London, formerly vice chairwoman, is now chief executive.

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G500-2021-057-Centene

A couple of strategic bets paid off for Centene over the past year. The health insurer dug in to the Affordable Care Act’s marketplaces even when the Obama-era health law’s future was far from certain, and through April 2021 it had added 320,000 new members under the Biden administration’s expanded special enrollment period for those individual insurance exchanges. Centene’s 2020 revenues exceeded $111 billion, after executives accurately predicted that the COVID pandemic would bring about a windfall, with growing demand for coronavirus-related services across the nation. The question is how long that win streak can last. “This a year with unique drivers,” said CEO Michael Neidorff in late April 2021, “which we cannot be certain can continue throughout all of 2022.”

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F500-2021-24-Centene

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Centene has at times been an oddity among its health insurance peers. In the past few years, the company has remained steadfast in serving the Affordable Care Act’s individual insurance markets, despite what would seem like never-ending legal and political uncertainty surrounding the government program. Well, it seems the skeptics lost that bet. Centene's strategy, coupled with acquisitions that focus on government-affiliated health plans like Medicare and Medicaid, propelled the insurer to 24% revenue growth in 2019, compared with the previous year. And it may benefit from another financial tailwind to come: The firm reportedly expects billions of dollars in revenue growth this year, due to the coronavirus crisis.

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Centene has at times been an oddity among its health insurance peers. In the past few years, the company has remained steadfast in serving the Affordable Care Act’s individual insurance markets, despite what would seem like never-ending legal and political uncertainty surrounding the government program. That strategy, coupled with acquisitions that focus on government-affiliated health plans like Medicare and Medicaid, propelled Centene to 24% year-over-year revenue growth in 2019—not to menition a steady, decade-long rise on the Fortune 500. And the insurer may benefit from another financial tailwind to come: The firm reportedly expects billions of dollars in revenue growth this year, due to the coronavirus crisis.

As we face unprecedented collective challenges, cooperation has become a business superpower.

50.CTW20.Centene

This insurer’s 24 million members, the vast majority of whom belong to Medicaid, Medicare, and Health Insurance Marketplace plans, are disproportionately vulnerable to harm from the pandemic. Centene has leaned into the challenge of keeping them healthy by plowing money into infrastructure that helps Medicaid members access telehealth, and by removing barriers (like prior authorizations) to COVID-19 testing and care.

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Centene is the largest Medicaid managed-care organization in the U.S. as of 2026. The company works with programs in the public and private sector to provide health care services to the underinsured and uninsured, military veterans, and commercial organizations. Programs it serves include Medicaid and Medicare plans, Medicare prescription drug plans, the Health Insurance Marketplace, and Tricare plans. It also operates its own health care and dental clinics and pharmacies.

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Q4 2024

Centene (CNC): Company Profile, Stock Price, News, Rankings

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Centene

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Good day, and welcome to the Centene Corporation Fourth Quarter and Full Year twenty twenty four Earnings Conference Call. All participants will be in a Please note today's event is being recorded. I would now like to turn the conference over to Jennifer Gilligan, Head of Investor Relations. Please go ahead.

Thank you, Rocco, and good morning, everyone. Thank you for joining us on our and Drew Asher, Executive Vice President and Chief Financial Officer of Centene will host this morning's call, which also can be accessed through our website at centene.com. Any remarks that Centene may make about future expectations, plans and prospects constitute forward looking statements for the purpose of the Safe Harbor provision under the Private Securities Litigation Reform Act of 1995. Actual results may differ materially from those indicated by those forward looking statements as a result of various important factors, including those discussed in our fourth quarter twenty twenty four press release, which is available on the company's website under the Investors section. Centene anticipates that subsequent events and developments may cause its estimates to change.

While the company may elect to update the forward looking statements at some point in the future, we specifically disclaim any obligation to do so. The call will also refer to certain non GAAP measures. A reconciliation of these measures with the most directly comparable GAAP measures can be found in our press release. With that, I would like to turn the call over to our CEO, Sarah London.

Sarah? Thanks, Jen, and thanks everyone for joining us this morning. As an enterprise, Centene is stepping into 2025 with a clear strategy, compelling embedded earnings power and positive momentum within each of our lines of business. We have delivered significant operational improvements and see exciting opportunity ahead as we continue to modernize our platform, automate our administrative processes through the deployment of AI and leverage our unparalleled data to create insights that make our business better, improve the quality of healthcare for our members and transform how the healthcare system serves millions of Americans. Today, we reported adjusted diluted EPS of $0.8 and full year 2024 adjusted diluted EPS of $7,.17 strong results that demonstrate the durability of our earnings power and position the company to execute against our strategic goals in 2025.

Driven by better than expected results during the Medicare annual enrollment period and a program expansion in Medicaid, we are lifting our full year 2025 revenue guidance by $4,000,000,000 Our outlook for full year 2025 adjusted diluted EPS remains unchanged as greater than $7,.25 and we are pleased with the trajectory we are on at this early stage in the year. To that end, let's talk about the opportunities in each of our business lines and how we are positioned for 2025. Medicaid. Today, we serve 13000000 Americans across our Medicaid portfolio, offering critical access to vital medical services and support for some of this country's most vulnerable and complex populations. Post COVID era eligibility redeterminations generated significant membership transition within the safety net program, but that chapter is now coming to a close.

In 2025, we expect improved membership stability and a gradual return toward equilibrium with respect to rates and the risk profile of our members. We continue to have constructive dialogue with our state partners, providing us with confidence in our ability to command rates that will support a return to target Medicaid margins. This is visible through a strong result for effective rates where we were able to achieve a mid 4% composite rate adjustment. We continue to expect a full year 2025 composite rate adjustment of 3% to four percent. While we have been focused on supporting our members and state partners through the redeterminations process, Centene's local Medicaid teams never stopped working to develop innovative care programs and solutions to promote access for our unique member base.

For Centene, transforming the health of the communities we serve means bringing care to our members, ensuring it is local, integrated and sustainable and working to influence positive health outcomes for our members as early as possible in the care journey, in some cases before they are even born. To this end, in Nevada, we are actively working to address the challenges of rural healthcare access for expectant moms. Our Silver Summit team is distributing tablets to support increased prenatal and postpartum telehealth visits for mothers in rural counties. We have also sponsored telehealth training with a particular focus on postpartum behavioral health support. Another great example of innovative programming comes from our Meridian team in Illinois where we are taking a food is medicine approach to supporting members with uncontrolled high blood pressure.

Members have access to a twelve week comprehensive program that includes nutrition counseling along with four weeks of medically tailored meals, followed by four weeks of healthy food boxes, followed by four weeks of fresh produce vouchers. The goal is to build and sustain the changes in eating habits that will support long term hypertension control. As we move through 2025, we are looking forward to turning the page on the redeterminations era, returning to overall Medicaid program stability and working closely with our state partners on innovations that deliver not only healthcare, but also better health within our communities. Turning to Medicare, we are pleased to be generating material progress within our Medicare business. The most recently released STARS results published during and applicable to benefit plan year 2026 are an excellent window into our notable advancement.

Within these results, fifty five percent of our members are associated with 3.5 star plans or better, up from twenty three percent last year. We continued to operate and execute with increased precision throughout 2024, driving year over year improvement in many of our core administrative measures. We also continue to make progress closing care gaps for our members with year over year performance improvement in our HEDIS rates as well as medication adherence. And in a credit to our team's leadership and effort around continuous improvement, go live for Medicare was the smoothest I've ever seen at Centene. We expect these and other advancements in our processes and key metrics to support STAR's results as we take on 2025.

As you've heard from us before, we pruned our Medicare Advantage footprint coming into 2025 to better align with our Medicaid presence and capabilities, enhancing our ability to leverage Centene's size, scale and expertise. With this refined footprint and refreshed products, we produced very good results relative to our expectations during the 2025 annual enrollment period. We now expect Medicare enrollment in the low to mid 900000s. Product design, successful management of our distribution channels and local market knowledge contributed to the better than expected results. It is still early, but based on things we can know today such as demographics and retention levels, we are pleased with the membership mix we are carrying into 2025, including a duals mix around 40%.

Amid program changes related to the Inflation Reduction Act, Medicare Part D presented Centene with a nice growth opportunity in 2024 and the team executed well against that strategic plan. Part D or PDP is positioned to be a larger business for us once again in 2025, both by revenue and membership. During open enrollment, we went to market with a deliberate focus on value for our members, including premium affordability. This plan complemented by the CMS demonstration program yielded strong AEP results that are expected to generate 2025 revenue of approximately $16,000,000,000 better than our previous expectations. Here too, we are early relative to observed experience, but as we look at factors such as member demographics and product selection, we remain confident in the financial objectives we set forth at including a 1% target margin for the PDP business in 2025.

Finally, a brief comment on the Medicare Advantage Advance Rate Notice released last month for the 2026 revenue year. While the information is not final, we are pleased to see the potential for a positive directional shift in funding for this important program, including the incorporation of a higher level of base rate medical cost trend. Final rates are expected in April 0 and we will continue to assess the various program changes anticipated for 2026 and the funding necessary to maintain compelling plans and create value for seniors as we build out our preliminary 2026 strategy. Within our Medicare segment's 2024 performance as a strong jump off point, we are excited to build upon the operational progress we made last year, while taking important steps on our path towards breakeven in Medicare Advantage in 2027. Finally, marketplace.

Across our footprint, our marketplace team has demonstrated consistently strong results through disciplined pricing, strong distribution relationships, as well as unmatched local knowledge of the marketplace population. Ambetter delivered an outstanding performance in 2024 and carried that momentum into their twelfth open enrollment period, once again executing well on fundamentals and positioning our portfolio of products for another year of strength in 2025. According to CMS, enrollment across the ACA market grew roughly 13%, but given in program integrity changes such as FTR or failure to report and the agent of record lock, our focus has been on effectuated membership. For Ambetter, January effectuated enrollment turned out to be a little stronger than what we had incorporated into our outlook for the business at our Investor Day in Dec. 0, driven by strong member retention.

Overall effectuating rates to date are directly in line with historical norms for Ambetter, which positions us through a peak marketplace membership during the slightly above 5000000 members. Looking down one level deeper, the demographic of our effectuated membership is similar to the member mix in 2024. Our book is expected to be roughly 51% female with an average age of 39.4, continuing a year over year trend slightly younger membership. At the same time, our metal tiers shifted slightly towards silver. While we have been near 70% silver over the last few years, in 2025, we expect to have nearly 75% of our membership in silver plans consistent with earlier years of the program.

As a reminder, our outlook continues to provide for an anticipated return to the pre COVID era membership seasonality with net attrition down to the mid-4.00 million dollars s by year end. Overall, we are pleased with the early indicators around our marketplace business and believe that we positioned ourselves well in 2024 by being the first carrier to introduce an agent of record lock. Our view through Jan. 0 suggests a more muted impact to membership from the program integrity changes than originally anticipated, but we believe some may require a longer tail to play out and that it will be a few months until effectuated enrollment results are fully understood. As you would expect, we will continue to closely monitor effectuation rates, voluntary member terminations and other trends within our book as we move through the As we think about future trends in the individual market, I did want to call out the strong results we saw during open enrollment in our Georgia markets.

We were pleased to be able to support Commissioner King and the State of Georgia as they made their transition to being a state based exchange. And we are excited to see how Georgia Access provides a model for advancing the growth of the individual market both on and off exchange, which includes access to ICRA. As we shared in Dec. 0, we continue to view ICRA as the future of health insurance for working Americans and is an important part of Centene's future earnings power. In Jan.

0, we announced the addition of Alan Silver to our leadership team. Alan is now President of Ambetter Health Solutions, which focuses on ICRA or individual coverage health reimbursement arrangements. Alan previously led retiree medical and ICRA initiatives at Willis Towers Watson and we are thrilled that he has joined our team. As we turn the page to a new year, it is important to acknowledge the incredible amount of hard work and tenacity from the Centene that enabled Centene to deliver on our financial commitments in 2024. Countless obstacles and macro level challenges faced by our team and our industry at large required focus and execution by colleagues from across our organization.

As a result of staying tightly aligned to our strategic goals and our mission, we are now well positioned to capitalize on the important opportunities that we see ahead of us in 2025 and beyond. In 2025, we expect to collaborate with our state partners to achieve better alignment for Medicaid rates and member acuity. Our Medicare Advantage business following successful execution during AEP will focus on key operational initiatives to drive us forward on our journey to breakeven in 2027. And as the category leader, our marketplace team will once again offer access to high quality and affordable healthcare this year to approximately 5000000 Americans. There is significant earnings power embedded in this business.

With between $3 and $4 of adjusted EPS opportunity to unlock over time, we are eager to achieve our next set of enterprise milestones, deliver on our commitments to our members and generate shareholder value in 2025 and beyond. With that, I'll turn it over to Drew.

Thank you, Sarah. Today, we reported results including $3,630,000,000,0.0 in premium and service revenue and adjusted diluted earnings per share of $0.8 in the quarter. For the full year, we reported $7,.17 of adjusted EPS well ahead of our previous guidance. In addition to ending the year strong, our results include a $0,.29 net benefit for a marketplace cost sharing reduction or CSR settlement related to prior years. Our consolidated HBR was 89.6%, while our full year consolidated HBR was 88.3% consistent with our previous guidance range.

Our Medicaid HBR was 93.4%, up 30 basis points from We were expecting a couple of late year 2024 retro adjustments that did not come in by year end. Medicaid trend story is similar to our last discussion, stable trends overall now that we are essentially through redeterminations other than behavioral health and some pockets of home health costs consistent with past commentary. Our full year 2024 Medicaid HBR at 92.5% temporarily high driven by redeterminations presents us meaningful earnings power over the next couple of years as we turn the page on 2024 and better match rates and acuity going forward. Case in point, we are yielding around the mid-4s in net rate increases for the cohort, which now represents about 40% of our annual Medicaid premium. The Medicaid membership settled out right in that $1,290,000,0.0 to $13,000,000 zone we had targeted and our 2025 guidance is predicated on staying in this membership zone throughout 2025.

Medicare segment performance was strong in including a very good overall 2024 performance in PDP, as a few of you were concerned with the Inflation Reduction Act at the beginning of 2024. The PDR related costs in Medicare Advantage were consistent with what we last told you. Commercial segment results were strong in due to the CSR settlement, otherwise they were right on track. Overall, exiting 2024 in a position of strength should bode well as we enter 2025 and continued Medicaid rate action as well as execution on initiatives designed to improve quality and the affordability of healthcare should enable us to achieve our 2025 Medicaid goals. Moving to other P and L and balance sheet items, our adjusted SG and A expense ratio was 8.9% in the compared to 9.7% last year, a continued blend of business mix and discipline.

Cash flow provided by operations was only $154,000,000 for the full year, driven by the timing of pharmacy rebate collections, the reduction in risk adjustment payables and a buildup of state premium payments receivable. As these items normalize in future periods, it sets us up for stronger operating cash flow in 2025. Our unregulated and unrestricted cash on hand at quarter end was $2.48,000,000 dollars During the we repurchased 1,440,000,0.0 shares of our common stock for $9.30,000,000 dollars For the full year 2024, we repurchased 42,000,000 shares for $3,000,000,000 We have taken out over 100,000,000 shares in the past few years. At the same time, our debt to adjusted EBITDA was only 2.9 times at year end. Our medical claims liability totaled $1,830,000,000,0.0 at year end and represents fifty three days in claims payable compared to 51 in and fifty four in 01/00 DCP note looking ahead, given the meaningful growth in PDP in 2025, largely driven by the Inflation Reduction Act and the fact that pharmacy claims complete very quickly compared to medical claims, this should lower our consolidated DCP by a few days in 2025.

While 2024 was certainly a challenging year, we still grew adjusted EPS over 7%, powered through redeterminations, made some great progress in Medicare stars and seized meaningful growth opportunities in marketplace and PDP. Let's turn the page and look ahead. As you heard from Sarah, our marketplace open enrollment period reflects very good execution by our team and keeps us on track for our twenty twenty five forecast elements covered at Investor Day. We expect to peak right above 5000000 marketplace members during and then a trip the remainder of the year back to the consistent with pre COVID enrollment patterns where was typically the annual peak of membership. And we need to see the pattern of membership throughout before we touch commercial revenue guidance of $34,000,000,000 In our Medicare business, 2025 volume has started out stronger than expected, driven by the annual enrollment period results, notably driven by stronger retention.

And our PDP business was over 7500000.0 members as we entered 2025. Accordingly, we expect the Medicare segment to be about $250,000,000,0.0 higher in premium revenue in 2025 than what we discussed at Investor Day in Dec. 0. In addition to that $250,000,000,0.0 there another expected $150,000,000,0.0 in Medicaid revenue from program change adding behavioral health coverage in one of our state contracts. So we are increasing our consolidated 2025 premium and service revenue guidance range by $4,000,000,000 to a range of $158,000,000,000 to $160,000,000,000 of premium and service revenue.

This is good news as you think about the long term earnings power of Centene. At this very early point in the year, we are reiterating our 2025 adjusted diluted EPS guidance floor of greater than $7,.25 Quick comment on 2026 Medicare rates. The preliminary percentage rate change for us is in the low to mid-3s, including the positive impact of STARS from the work we did in 2023 and 2024. It's great to have 2024 behind us and have earnings power consistent with our Investor Day discussion in front of us. As importantly, we are really excited about the number of initiatives in flight and in our sites designed to make healthcare simpler, more accessible and more affordable, just like we've been able to help shape in marketplace, which has been a great solution for over 23000000 Americans.

We are proud and honored to serve members, states and the federal government in Medicaid, Medicare and marketplace programs into 2025 and beyond. Thank you for your interest in Centene. Rocco, let's open up the line for questions.

The first question comes from Josh Roskin with Nephron Research. Please go ahead.

Hi, thanks. Good morning. I heard the 13% on the exchanges, but maybe you could speak to your expectations around total exchange market growth when all is said and done in 2025 and maybe a little bit more color on what you're seeing around that subsidy verification process. And then maybe even just walk us through the mechanics of how that works at the member level and when you think you'll know your fully effectuated membership totals?

Yes, absolutely. Thanks, Josh, for the question. So CMS put out $13,000,000 sorry, 13% as the sort of Jan. 0 to Jan. 0 enrollment growth.

As we've talked about before, our view was that effectuated membership was going to be sort of the important number to track, partly because of the program integrity changes that were being put in place. And we referenced what we were seeing at December Investor Day in terms of slower throughput relative to over enrollment, because of the agent of record lock that we saw improve as we move through OE, but we still think there's probably a little bit of backlog that is being worked through there. And then again the FTR failure to report process, I think we had anticipated a little bit more impact in the OE period. That appears to be more muted, but that's where we also think there is potentially a longer tail for that to play out. And so to your point, sort of the step during that stepping through that as an illustrative process, what happens there is a notification to the member of the need to file taxes and sort of notification sent to the members relative to the impact that that would have on enhanced ABTCs.

Consumers have the opportunities to attest to having filed taxes and then there's a process of multiple checkpoints as we move through Feb. 0 and March 0 and ultimately into the April 0 window. And so that's part of why we think there may be additional impact that we see in And so we're continuing to hold our view relative to impact on effectuated enrollment, but we're going to need to see how that plays out. So a little bit stronger in terms of our effectuation in Jan. 0, which means we're starting from a good place, which is great.

But we want to see a couple more months play out until we know where that's going to settle.

And I think you said the effectuation levels are similar to what you've seen in the past. So what is that delta? If there's 13% total growth, what do you think that translates into effectuated? Or should we say, well, if effectuation is the same percentage, then 13 market growth is 13% effectuated growth?

There's usually a delta between enrollment and effectuation. And again, what we're seeing from an effectuation standpoint is, as you said, directly in line with historical norms. So the growth that we saw was a little bit stronger than the 13% and the effectuation then that retention from our book is putting our membership at slightly above $5,000,000 But again, I think we need to see how the program integrity impacts play out in to know what the net market growth post effectuations will look like.

Thank you. And our next question today comes from Justin Lake of Wolfe Research. Please go ahead.

Thanks. Good morning. Just a couple of quick numbers questions. First, looks like the PYD in the quarter was north of $400,000,000 up about $300,000,000 year over year. Can you tell us what drove that?

And Drew, I know it doesn't all hit the bottom line. So maybe you could tell us the net benefit there? And then just quickly on the Medicaid retros that didn't hit in the anything you could share on the size there? And is it just a timing issue where they'll hit in Or do they just not happen at all? Thanks.

Yes. Why don't I hit the retros and then if you want to talk about PYD. So as you heard from Drew, we had rate action expected late in the quarter that didn't come through. We're not counting on that in 2025. So to the extent that any of that does materialize, it would be a benefit to 2025.

We did see positive movement in the oneone rates and in some cases those are sort of linked. And so that's where you saw the mid-four composite rate for oneone. So very consistent with the theme that we've seen throughout this process, which is I think we've made great progress in terms of being able to influence states with data and get to the right level of rates. We just aren't always perfect in predicting the timing.

Justin, you're right with the prior year development. If you look on the last page of the press release, we had about a little over $240,000,000,0.0 for the full year, including strength in That includes the CSR. That's a medical expense item of over a couple of hundred million dollars. So that leaned into probably that differential you're referring to in

Thank you. And our next question today comes from Stephen Baxter, Wells Fargo. Please go ahead.

Hi, thanks. Just wanted to ask about the Medicaid rate assumptions. I mean based on the rates that you're getting for oneone, it seems like the rest of the year placeholder is something probably in the zone of 2%, two point five %. And logically, it seems like every rate update you get going forward should be better informed both from a cost and acuity perspective. Is there anything structurally different about the dislocation in the rest of the book that suggests that a lower rate update would really be kind of the sensible base case at this point?

Or how should we think about the conservatism potentially of the assumptions you're making in Medicaid rates for the second half of the year? Thank you.

Centene (CNC) Q4 2024 Earnings Call Transcript

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